Marelli Automotive Lighting USA - Chapter 11 Plan Terms

Plan / RSA Terms

Overview

• The debtors filed their amended joint plan of reorganization [Docket No. 2851] on Oct. 16, 2026. It converts the junior DIP's roll-up tranche into ownership of the reorganized company. Holders of the Tranche C DIP loans, which are the roll-up of senior loan claims held by the DIP lenders, receive their pro rata share of the new common stock, subject to dilution by the management incentive plan. At the Required Plan Sponsors' election, the Tranche B DIP loans are paid in cash, exchanged for exit facility loans or converted into equity. The Tranche A and Tranche A-1 DIP loans and the prepetition emergency loans are paid in full in cash, and general unsecured claims ride through unimpaired. Senior lenders that did not join the DIP receive cash equal to 11.00% of their prepetition claims, while senior lenders that are also DIP lenders waive any recovery on their senior loan claims. Preferred and common equity in debtor Marelli Holdings Co., Ltd. is cancelled with no recovery.
• Marelli Automotive Lighting USA LLC and its debtor affiliates filed Chapter 11 in the District of Delaware on June 11, 2025. They entered into the restructuring support agreement the same day with their consenting emergency and senior lenders, the Plan Sponsors and Kohlberg Kravis Roberts & Co L.P. as consenting equity sponsor. The plan carries out the restructuring set out in that agreement and its restructuring term sheet. The Plan Sponsors are the DIP lenders that hold the Tranche A-1, Tranche B and Tranche C DIP loans or commitments.
• The plan was filed jointly for administrative convenience, but it is a separate plan for each debtor and does not substantively consolidate them. It may become effective for one or more debtors without becoming effective for all, although the debtors expect a common effective date for substantially all of them.
• Class 4 senior loan claims are the only class entitled to vote. Classes 1, 2, 3 and 5 are unimpaired. Classes 8, 9 and 10 are cancelled and deemed to reject. The intercompany classes, Classes 6 and 7, are either reinstated or cancelled consistent with a restructuring transactions memorandum. The debtors will seek cramdown under section 1129(b) against any rejecting class.
• Distributions are funded with cash on hand at the effective date, the new common stock and the exit facility or its cash proceeds. Effectiveness depends on, among other things:
  • closing of the exit facility
  • court approval of OEM accommodation agreements with certain of the debtors' original equipment manufacturer customers
  • an aggregate amount of claims filed against any claims bar date that the Required Plan Sponsors find acceptable in their sole discretion

Restructuring Support Agreement and Supporting Parties

• The restructuring support agreement is dated June 11, 2025, and attaches the restructuring term sheet as Exhibit B. Its parties are the debtors and:
  • the consenting emergency lenders, meaning emergency lenders that signed the agreement and remain party as of the effective date, plus any emergency lender that joins later and remains party
  • the consenting senior lenders, meaning senior lenders that delivered counterpart signature pages and remain party as of the effective date, plus later joiners; those represented by Mizuho's advisors are the Consenting Senior Bank Lenders
  • the Plan Sponsors, meaning the DIP lenders holding Tranche A-1, Tranche B and Tranche C DIP loans or commitments
  • Kohlberg Kravis Roberts & Co L.P., the consenting equity sponsor
• The Ad Hoc Group of Senior Lenders is a group of senior loan holders and DIP lenders. Its advisors are Akin Gump Strauss Hauer & Feld (counsel), Houlihan Lokey Capital (investment banker), AlixPartners (financial advisor), Ernst & Young (tax advisor) and Cole Schotz (Delaware counsel). Its professionals file no fee applications and are paid under the RSA, the restructuring term sheet and the DIP orders.
• The Consenting Senior Bank Lenders are represented by Mizuho's professionals:
  • Davis Polk & Wardwell, restructuring counsel
  • Richards, Layton & Finger, Delaware counsel
  • Nagashima Ohno & Tsunematsu, Japanese counsel
  • Anderson Mori & Tomotsune, Japanese financing counsel
  • Huron Consulting Services, financial advisor
• The RSA must stay alive for the plan to go effective. It must not have been terminated as to all parties, and no event purporting to terminate it as to all parties may have occurred, even if the automatic stay or anything else blocks the termination itself. If the plan fails as to any debtor, the RSA provisions that survive termination remain in effect. The plan's integration clause expressly does not limit the RSA's effectiveness.
• Every consent and approval right in the RSA, the DIP orders and the DIP credit agreements is incorporated into the plan and enforceable as if stated in it, notwithstanding anything in the plan, the disclosure statement or the confirmation order. This includes rights over the form and substance of Plan Supplement and definitive documents and any amendments, waivers or deviations. The plan's silence on any RSA information, notice or consent right does not impair that right.
• Consenting stakeholder consent is not required for ministerial notices, professional retention and fee applications and statements, or schedules and statements of financial affairs.

Prepetition Capital Structure

• The senior loans are term and revolving loans under a facility agreement dated March 23, 2017. Marelli Holdings Co., Ltd. is borrower, Mizuho Bank, Ltd. is agent and KKR Capital Markets Japan Ltd. is coordinator. Senior lenders that are also DIP lenders are participating senior lenders, and all other senior lenders are non-participating. The DIP orders authorized the roll-up of senior loan claims held by the DIP lenders into the junior DIP facility as the Tranche C loans.
• The emergency loans are term loans under a money consumption and loan agreement dated May 20, 2020, with Marelli Holdings as borrower and Mizuho as lender, security agent and facility agent. Emergency loan claims run until the earlier of repayment in full and the effective date. They include accrued and unpaid interest, fees, costs, premiums, indemnification and reimbursement obligations and other loan obligations arising before or after the petition date, including any one-time fees or other amounts payable under the DIP orders.
• Mizuho serves as administrative agent under the senior loan agreement and as security agent and facility agent under the emergency loan agreement; together these roles are the prepetition agents. The plan does not override Mizuho's rights under paragraph 4 of the seventeenth interim cash management order [Docket No. 2738] unless the parties mutually agree.
• The equity consists of preferred equity interests and common stock interests in Marelli Holdings Co., Ltd.
• The senior loan documents are cancelled on the effective date but survive to the extent needed for three purposes:
  • distributions to senior lenders
  • post-effective date actions by the debtors, the reorganized debtors and the prepetition agents
  • the prepetition agents' enforcement of their rights against parties other than the debtors, including priority-of-payment, reimbursement and indemnification rights
  The prepetition agents are relieved of all further duties under the senior loan documents on the effective date.

DIP Financing and Treatment of DIP Claims

• The DIP financing consists of two facilities, each with GLAS USA LLC as DIP agent:
  • Senior DIP facility: a delayed-draw, first-out super-senior secured facility under the senior DIP credit agreement [Docket No. 2218-1]. It provides the Tranche A first-out super-senior secured new-money term loans. Deutsche Bank AG, London Branch is the Initial Tranche A Lender.
  • Junior DIP facility: governed by a junior secured superpriority DIP credit agreement [Docket No. 2218-2], which the plan defines as a delayed-draw senior secured facility. It provides the Tranche A-1 senior secured new-money term loans, the Tranche B secured new-money term loans and the Tranche C roll-up loans.
• The DIP orders are the two interim DIP orders [Docket Nos. 109 and 355], the final DIP order [Docket No. 449] and the DIP amendment final order [Docket No. 2218]. The DIP amendment final order authorized the debtors to amend the DIP credit agreements.
• Allowed amount: DIP claims are allowed superpriority administrative claims equal to each tranche's outstanding principal at the effective date, plus accrued and unpaid interest and all other DIP obligations as defined in the final DIP order and amended by the DIP amendment final order. Interest keeps accruing under the DIP credit agreements and DIP orders until the claims are paid in full in cash or otherwise satisfied with the holders' consent.
• On the effective date, unless a holder agrees to other treatment:
  • Tranche A: paid in full in cash
  • Tranche A-1: paid in full in cash
  • Tranche B: at the Required Plan Sponsors' election, applied to all Tranche B claims, either (a) paid in full in cash; (b) exchanged in whole or in part for exit facility loans, with cash for any portion not exchanged; or (c) converted in whole or in part into a pro rata share of new common stock or a combination of cash and new common stock
  • Tranche C: a pro rata share of new common stock
• New common stock issued to Tranche B and Tranche C holders is subject to dilution by the management incentive plan and by any other equity the reorganized debtors issue with the Required Plan Sponsors' consent.
• Under the Required Plan Sponsors definition, any plan treatment of the Tranche A-1 loans other than repayment in full in cash requires the consent of holders of 100% of the outstanding Tranche A-1 loans.
• All cash, exit loans and stock on account of DIP claims must be delivered on the effective date to the DIP agent, which acts as disbursing agent for the DIP claims. All guarantees of the DIP claims are released automatically once the claims are satisfied, and the debtors have no setoff or recoupment right against DIP claims.

Treatment of Claims and Interests

• Holders receive their treatment on the later of the effective date and the date the claim or interest is allowed. The debtors and a holder may agree to different treatment only with the Required Plan Sponsors' consent, not to be unreasonably withheld.
• Unclassified claims:
  • Allowed administrative claims are paid in cash, subject to the consent of the Ad Hoc Group of Senior Lenders except for administrative claims held by Consenting Senior Bank Lenders or consenting emergency lenders. Payment is due on the effective date if the claim is allowed by then, no later than 30 days after the allowance order becomes final if allowed later, in the ordinary course for postpetition ordinary-course liabilities, or as agreed or ordered.
  • Priority tax claims receive treatment consistent with section 1129(a)(9)(C).
  • Professional fee claims and DIP claims are treated as described in their own sections.
• Class 1, other secured claims (unimpaired, presumed to accept; not entitled to vote): at the debtors' election, with the Required Plan Sponsors' consent not to be unreasonably withheld, one of three treatments:
  • payment in full in cash on the effective date, or under the claim's terms if not yet due
  • reinstatement
  • such other recovery as section 1129 requires
• Class 2, other priority claims (unimpaired, presumed to accept; not entitled to vote): treatment consistent with section 1129(a)(9).
• Class 3, emergency loan claims (unimpaired, presumed to accept; not entitled to vote): payment in full in cash on the effective date, to the extent not paid earlier.
• Class 4, senior loan claims (impaired, entitled to vote): on the effective date, treatment turns on whether the holder is also a DIP lender:
  • Each non-participating senior lender receives cash equal to 11.00% of its allowed claim, measured as principal plus all accrued and unpaid interest, fees, costs, expenses, indemnification and reimbursement obligations, premiums, additional interest, other financial indebtedness and other obligations under the senior loan agreement through the day before the petition date.
  • Each participating senior lender waives any recovery on its senior loan claim.
  Class 4 is the only recovery for senior loan claims. Holders may not take in any other class, including on account of any purported deficiency claim, and the general unsecured claim definition expressly excludes senior lender deficiency claims.
• Class 5, general unsecured claims (unimpaired, presumed to accept; not entitled to vote): at the debtors' option and with the Required Plan Sponsors' consent, either reinstatement or other treatment that leaves the claim unimpaired.
  • The class includes ordinary-course trade vendor claims, claims on indemnification obligations that are not reinstated or assumed, and contract-rejection damages.
  • Payment of all general unsecured distributions then due is an effective-date condition, and waiving it requires the committee's consent.
  • A holder's election or consent to different treatment, including through an OEM accommodation agreement, controls.
• Class 6, intercompany claims (either unimpaired and presumed to accept, or impaired and deemed to reject; not entitled to vote): at the reorganized debtors' option, with the Required Plan Sponsors' consent and consistent with the restructuring transactions memorandum. Each claim is reinstated, set off, settled, distributed, contributed, cancelled or released without distribution, or given other treatment the reorganized debtors and the Required Plan Sponsors reasonably determine.
• Class 7, intercompany interests (either unimpaired and presumed to accept, or impaired and deemed to reject; not entitled to vote): consistent with the restructuring transactions memorandum, either reinstated, or distributed, contributed, set off, cancelled and released without distribution, or otherwise addressed at the reorganized debtors' option with the Required Plan Sponsors' consent, not to be unreasonably withheld. To the extent reinstated, distributions on intercompany interests are received solely so the holders can use funds and assets to make certain plan distributions, satisfy certain obligations of other debtors and serve other uses the plan contemplates.
• Class 8, preferred equity interests in Marelli Holdings (impaired, deemed to reject; not entitled to vote): cancelled, released and extinguished with no distribution.
• Class 9, common stock interests in Marelli Holdings (impaired, deemed to reject; not entitled to vote): cancelled, released and extinguished with no distribution.
• Class 10, section 510(b) claims (impaired, deemed to reject; not entitled to vote): cancelled and discharged on the effective date with no distribution. Any such claim may be allowed only by final order.
• Voting mechanics: acceptance by at least one voting class satisfies section 1129(a)(10). A voting class in which no holder votes is deemed to accept, and classes with no allowed or temporarily allowed claims as of the confirmation hearing are eliminated. If cramdown requires a modification, the debtors may change a class's treatment to make it unimpaired to the extent the RSA permits.
• The debtors and reorganized debtors keep all defenses, setoff and recoupment rights against unimpaired claims, and may reclassify any claim under section 510 to reflect contractual, legal or equitable subordination.

Exit Facility

• On the effective date, Reorganized Marelli and/or one or more other reorganized debtors will enter into the exit facility, which may be a new credit facility, a series of financing facilities or any other form of financing. Its terms will be set in exit facility documents, which the Plan Supplement may include.
• The exit facility documents must be reasonably acceptable to the Required Plan Sponsors under the exit facility provision, though the effective-date condition requires the exit facility terms to be acceptable to both the debtors and the Required Plan Sponsors, with no reasonableness qualifier.
• If the Required Plan Sponsors elect the exchange option, Tranche B holders receive exit facility loans for all or part of their claims, with cash for any portion not exchanged. Any DIP lender that is also an exit lender directs the disbursing agent and the exit facility agent to act as disbursing agent where the plan requires, execute the exit documents and take related actions. Exit lenders are deemed party to the exit facility documents without signing them.
• The confirmation order operates as final approval of the exit facility, including all fees, indemnities and expenses. Exit liens are deemed granted and perfected on the effective date, perfection occurs automatically on entry of the confirmation order (subject to the effective date occurring), and the liens are not subject to recharacterization, equitable subordination, or avoidance as preferences or fraudulent conveyances.
• The exit facility agent will be the entity identified in the exit facility documents that is acceptable to the exit lenders and the borrowers.

New Common Stock, Governance and Management Incentive Plan

• Reorganized Marelli will issue the new common stock, a single class of common equity or membership interests, on the effective date. Reorganized Marelli means reorganized Marelli Holdings or a successor, including Marelli Corporation or a subsidiary, or any new entity formed to own directly or indirectly all or substantially all of the debtors' assets or equity and to issue the new common stock. The debtors determine the form of the reorganized debtors, including any new entities, with the Required Plan Sponsors' consent.
• Plan shares, other than management incentive plan shares, are issued under section 1145. They are freely tradable by any recipient that is not an affiliate of Reorganized Marelli, has not been one within 90 days of the transfer, and is not an underwriter. Management incentive plan shares, and any other shares issued outside section 1145, rely on Section 4(a)(2), Regulation D, Regulation S or other exemptions and are restricted securities.
• Every holder of new common stock is deemed a party to the new stockholders agreement and the new organizational documents without signing. The stockholders agreement must be consistent in all material respects with the restructuring term sheet and the plan. The organizational documents must:
  • be consistent with the RSA, the restructuring term sheet and section 1123(a)(6)
  • be acceptable to the debtors and the Required Plan Sponsors
  • prohibit the issuance of non-voting equity securities
• No fractional shares or cash in lieu are distributed. Fractions of one-half or more round up and smaller fractions round down.
• The current board's term expires on the effective date. The initial board of Reorganized Marelli will be appointed in accordance with the RSA, the plan and the new organizational documents, and designated under the new organizational documents and new stockholders agreement. Its members and the officers of the reorganized debtors will be identified in the Plan Supplement, and compensation for any director or officer who is an insider will be disclosed before the effective date. Removal, appointment and replacement provisions will appear in the new organizational documents.
• The special committee of the board of managers of Marelli Holdings Co., Ltd., made up of Stefan Selig, Roger Meltzer and Noboru Yamamoto, keeps authority after the effective date over fee requests by professionals acting at its direction. Its privileged and confidential documents and communications do not transfer to Reorganized Marelli.
• After the effective date, the new board may adopt a management incentive plan granting equity and equity-based awards to employees, directors, consultants and other service providers. Participants, allocation, timing, form and structure are left to the board's discretion.

Restructuring Expenses and Professional Fees

• Restructuring expenses are all reasonable and documented prepetition and postpetition fees and expenses of advisors to the consenting stakeholders, the DIP lenders, the Initial Tranche A Lender, the DIP agent and the prepetition agents, plus all fees and expenses payable under the DIP documents, including indemnification of the DIP lenders and DIP agent. They expressly include the fees of the Ad Hoc Group's professionals, the Consenting Senior Bank Lenders, the consenting lenders' professionals and the Ad Hoc Group's members.
• Restructuring expenses incurred or estimated through the effective date are paid in full in cash on the effective date under the RSA, the DIP orders and any other fee arrangements, without retention or fee applications or court review. Estimates are due at least five business days before the anticipated effective date and do not cap the amount owed. Payment of all accrued restructuring expenses, and of the fees of the consenting stakeholders, DIP lenders, Initial Tranche A Lender and DIP agent, is an effective-date condition.
• After confirmation, the debtors and reorganized debtors keep paying, in the ordinary course, restructuring expenses related to the plan and to the implementation, consummation and defense of the restructuring transactions, whether incurred before, on or after the effective date. They pay under any engagement letter, the DIP orders and the RSA. The reorganized debtors also pay Mizuho's reasonable fees as administrative agent for any action it takes on disbursements, including distributions of new common stock.
• Final fee applications are due 45 days after the effective date, and allowed professional fee claims are paid no later than five business days after allowance.
  • By the effective date the debtors fund an interest-bearing professional fee escrow account, sized in accordance with the DIP budget and based on professionals' good-faith estimates delivered no later than five business days before the anticipated effective date. The estimates do not bind the professionals, and the debtors estimate for any professional that does not provide one.
  • The escrow is held in trust solely for professionals, is free of liens and is not estate property. Any excess reverts to the reorganized debtors, and payment of allowed fees is not limited to the escrow.
• After the confirmation date, professionals may be retained and paid in the ordinary course without court approval, but the fee examiner order remains in effect on its own terms.

Key Dates and Deadlines

• Petition date and RSA date: June 11, 2025
• Amended plan filed: Oct. 16, 2026
• Plan Supplement: filed no later than seven calendar days before the confirmation objection deadline, to the extent available, or by a later date the court approves
• Restructuring expense and professional fee estimates: at least five business days before the anticipated effective date
• Distribution record date: the confirmation date, unless the debtors choose another date with the Required Plan Sponsors' consent or the court designates one
• Administrative claims bar date: 30 days after the effective date, excluding restructuring expenses, DIP claims, claims allowed under the DIP orders or cash management order, section 503(b)(1)(D) claims and section 503(b)(9) claims
• Professional fee claims: 45 days after the effective date; the fee examiner's final fee application is due 30 days after it files its reports on all final fee applications
• Administrative claims objection deadline: 60 days after the applicable administrative claims bar date, extendable by the court
• Rejection damages claims: 30 days after the effective date of the rejection, or the date specified in the applicable OEM accommodation agreement
• Executory status disputes: the debtors have 45 days after a final order resolving whether a contract is executory to change its treatment
• Unclaimed distributions: revert to the reorganized debtors six months after the applicable distribution date

Conditions Precedent to the Effective Date

• The effective date requires each of the following:
  • the RSA has not been terminated as to all parties and remains in full force
  • the DIP orders have been entered and remain in full force
  • the restructuring transactions, including all transactions in the restructuring term sheet, have been substantially consummated consistent with the RSA and the plan
  • the definitive documents are consistent in all material respects with the RSA's consent rights and terms, have been approved by the parties with consent rights, and have been executed and delivered with their conditions satisfied or waived
  • all definitive documents have been executed or effectuated in a form materially consistent with the RSA consent rights and mutually agreed by the debtors and the Required Plan Sponsors; where general unsecured creditors' rights are affected, this is done in consultation with the committee's advisors and, as applicable, the Required Consenting Emergency Lenders or the Required Consenting Senior Bank Lenders
  • all required governmental, regulatory and third-party approvals have been obtained or waived and all waiting periods have expired, with no action taken or threatened that would restrain the restructuring transactions or impose materially adverse conditions on them or on their financial benefits to the Plan Sponsors
  • all distributions then due to holders of allowed general unsecured claims have been paid
  • court-approved professional fees have been paid in full in cash or escrowed
  • all accrued restructuring expenses and the fees of the consenting stakeholders, DIP lenders, Initial Tranche A Lender and DIP agent have been paid in full in cash
  • Reorganized Marelli has issued the new common stock
  • the debtors have obtained the exit facility on terms acceptable to the debtors and the Required Plan Sponsors
  • the exit facility documents have been executed, their conditions have been satisfied or waived in writing, and the exit facility has closed
  • the OEM accommodation agreements, in form acceptable to the debtors and the Required Plan Sponsors, have been executed, their conditions other than the effective date have been satisfied or waived, and the court has approved them by separate final order or in the confirmation order
  • the aggregate amount of claims filed against any claims bar date is acceptable to the Required Plan Sponsors in their sole discretion
  • the confirmation order has been entered and has not been reversed, stayed, modified or vacated on appeal
• Waiver: conditions may be waived only in writing, which may be by email, with the consent of the debtors and the Required Plan Sponsors, and with no court order needed. Some conditions require additional consent:
  • the definitive document and fee payment conditions also need the consent of any consenting stakeholder that holds RSA consent rights over the relevant definitive document
  • the general unsecured distribution condition also needs the committee's consent, plus the Required Consenting Emergency Lenders' consent where a consenting emergency lender holds the affected claims and the Required Consenting Senior Bank Lenders' consent where a Consenting Senior Bank Lender holds them
• Staggered effective dates: the debtors and the Required Plan Sponsors, each in their sole discretion, may agree to apply the conditions debtor by debtor so that individual debtors emerge earlier. The debtors will not close the case of any debtor whose effective date has not occurred, and staggering does not affect the consent rights of the Consenting Senior Bank Lenders and the consenting emergency lenders.
• If the effective date does not occur for a debtor, the plan is void as to that debtor, without waiver or prejudice. If the plan is revoked or confirmation and consummation fail, all settlements, contract assumptions and rejections, and documents under the plan are void.

Consent, Consultation and Amendment Thresholds

• Required Plan Sponsors means:
  • at all times, at least two unaffiliated holders that together hold at least 75% of each of the outstanding Tranche A-1, Tranche B and Tranche C DIP loans
  • if the plan repays the Tranche A-1 loans in any form other than full cash repayment, also holders of 100% of the outstanding Tranche A-1 loans
• Required DIP Lenders means the following three groups acting collectively:
  • Required Senior DIP Lenders: holders of at least 50.01% of outstanding Tranche A loans plus unfunded Tranche A commitments. The group must include Deutsche Bank as Initial Tranche A Lender while it holds at least 10% of that sum, and at least two unaffiliated Tranche A lenders whenever there are two or more.
  • Required Tranche A-1 DIP Lenders: at least two unaffiliated holders of at least 75% of outstanding Tranche A-1 loans plus unfunded Tranche A-1 commitments.
  • Required Tranche B/C DIP Lenders: at least two unaffiliated holders of at least 75% of outstanding Tranche B loans plus unfunded Tranche B commitments.
• Required Ad Hoc Group Lenders means at least two unaffiliated Ad Hoc Group members holding at least 75% of the senior loans held by the group, including through participations, swaps or derivatives. A derivative counterparty that is itself a consenting senior lender is treated as the holder.
• Required Consenting Senior Bank Lenders means Consenting Senior Bank Lenders holding at least 50.1% of the senior loans held by that group. Required Consenting Emergency Lenders means each consenting emergency lender, so that group acts by unanimity.
• The Required Plan Sponsors' consent controls most implementation choices:
  • agreed alternative treatment for any class
  • the elections for other secured, general unsecured and intercompany claims
  • the Tranche B election
  • any equity issuance that dilutes the new common stock
  • changes to the distribution record date
  • selection of a third-party disbursing agent
  • the form of the reorganized debtors and the new organizational documents
  • staggered effective dates
  Definitive documents must be acceptable to the debtors, the Required Plan Sponsors and any other party with RSA consent rights over them. DIP documents must be acceptable to the debtors and the Required DIP Lenders.
• Plan modifications are subject to the consent rights of the consenting stakeholders, the Required Plan Sponsors and the DIP lenders. Post-confirmation material modifications also list the committee's consent rights. Before filing, the debtors must consult, and give advance notice of the filing to:
  • the committee, on changes affecting general unsecured claims
  • the Required Consenting Emergency Lenders, on changes affecting emergency loan claims
  • the Required Consenting Senior Bank Lenders, on changes affecting senior loan claims or general unsecured claims held by Consenting Senior Bank Lenders
  If material modifications affect their creditors' treatment, each of those three parties may seek to adjourn its objection deadline and the confirmation hearing.
• Plan Supplement documents are subject to the RSA consent rights. The debtors must consult the committee on changes affecting general unsecured claims, the Required Consenting Emergency Lenders on changes affecting emergency loan claims or general unsecured claims held by consenting emergency lenders, and the Required Consenting Senior Bank Lenders on changes affecting senior loan claims or general unsecured claims held by Consenting Senior Bank Lenders.
• The plan is inconsistent on priority between the plan and the Plan Supplement: the controlling-document clause gives the Plan Supplement priority unless the supplement document or the confirmation order says otherwise, while the exhibits provision gives the body of the plan priority unless the court orders otherwise. The confirmation order controls over the plan, and the plan controls over the disclosure statement.
• Under the nonseverability clause, no plan provision may be deleted or modified without the consent of:
  • the Required Ad Hoc Group Lenders
  • the Required DIP Lenders
  • the Required Plan Sponsors
  • the debtors or reorganized debtors
  • the Required Consenting Emergency Lenders and the Required Consenting Senior Bank Lenders, to the extent their constituents are adversely implicated
  The debtors may revoke or withdraw the plan before confirmation only subject to the RSA.

Releases, Exculpation and Injunction

• Released parties, in each case with their predecessors, successors, affiliates, subsidiaries, equity holders, funds and related parties:
  • each debtor and reorganized debtor
  • the consenting stakeholders, meaning the debtors, the consenting emergency and senior lenders, the Plan Sponsors and Kohlberg Kravis Roberts & Co L.P.
  • GLAS USA LLC as DIP agent, and the DIP lenders
  • Deutsche Bank AG, London Branch as Initial Tranche A Lender
  • the Plan Sponsors
  • Mizuho as the prepetition agents
  • the Ad Hoc Group's professionals and the Consenting Senior Bank Lenders' professionals
  • the committee and each of its members, in that capacity
  Any holder that objects to the releases, opts out, or fails to opt in where opting in is required is not a released party.
• Debtor release: the debtors, the reorganized debtors and their estates release each released party from all claims, including derivative claims. Covered matters include the debtors' management, ownership and operation, their restructuring efforts, intercompany transactions, the RSA, the DIP facilities, the exit facility documents, the negotiation of and entry into the OEM accommodation agreements, the Chapter 11 cases, and plan distributions. Carve-outs are limited to:
  • post-effective date obligations
  • causes of action on the retained causes of action list in the Plan Supplement
  • acts or omissions a final order determines to be actual fraud
• Third-party release: releasing parties grant a release of the same scope. The releasing parties are:
  • the same institutional parties listed as released parties
  • holders that vote to accept
  • holders that vote to reject, are given the chance to opt out, and do not opt out
  • holders deemed to accept or deemed to reject that affirmatively opt in
  • holders that abstain and affirmatively opt in
  A holder that opts out, fails to opt in where required, or objects to the releases is not a releasing party.
• The two releases have different carve-outs. The third-party release carves out the debtor-release items plus ordinary-course commercial claims between non-debtors, such as receivables and payables, and gross negligence and willful misconduct in addition to actual fraud. The U.S. Trustee is not treated as granting any release.
• Exculpated parties:
  • each debtor
  • the committee and its members
  • their officers, directors and LLC managers who served at any time between the petition date and the effective date
  • their court-approved professionals
  Exculpation covers acts and omissions between the petition date and the effective date relating to the cases, the RSA and related prepetition transactions, the disclosure statement, the plan, the restructuring transactions, the special committee's independent investigation and the issuance of securities. It carves out actual fraud determined by final order.
• A plan injunction bars actions on discharged, released or exculpated claims against the debtors, the reorganized debtors, the released parties and the exculpated parties. Setoff is preserved only if asserted in a timely filed document that expressly preserves it.
• The plan preserves three categories of claims despite the releases:
  • PBGC and pension plan claims against any individual for breach of ERISA fiduciary duty
  • the reorganized debtors' liability under ERISA and the Internal Revenue Code on the pension plan
  • under the insurance-applicability provision, any cause of action the debtors or any other entity holds against any other entity, including insurers under insurance policies or applicable indemnity, together with the insurers' rights and defenses, including coverage defenses
• All estate causes of action, including avoidance actions, vest in and are retained exclusively by the reorganized debtors unless expressly released or settled. The retained causes of action list will be filed with the Plan Supplement.

OEM Accommodation Agreements and Executory Contracts

• The OEM accommodation agreements are agreements between the debtors and certain original equipment manufacturer customers that resolve existing liabilities or set go-forward business terms. They must be approved by separate final order or in the confirmation order. Beyond the effective-date condition, the agreements:
  • amend the assumed contracts they cover
  • may override the prepetition character, validity, priority or amount of related claims
  • may set their own deadline for rejection damages claims
  • bind any general unsecured creditor that elects different treatment through them
  The confirmation order authorizes consummation of any OEM agreements not already approved and executed under a separate final order.
• All executory contracts and unexpired leases not previously assumed or rejected are deemed assumed on the effective date. The exceptions are contracts on the schedule of rejected contracts in the Plan Supplement, contracts rejected by prior final order, and contracts subject to a rejection motion pending on the confirmation date or seeking a rejection date after the effective date.
• Cure:
  • monetary defaults are cured in cash on the effective date or in the ordinary course
  • disputed cures are paid after a final order or a settlement
  • assumption releases all prior defaults, including change-of-control defaults, but does not release indemnification obligations
  • change-of-control and similar provisions are deemed modified so that the plan transactions give counterparties no termination or default rights
  • proofs of claim on assumed contracts are expunged
• Rejection damages are general unsecured claims and are disallowed if not filed on time.
• Indemnification provisions for current and former directors, officers, managers, employees and professionals are reinstated on terms no less favorable than before. The reorganized debtors will not reduce directors' and officers' coverage, including any tail policy in effect or purchased as of the petition date, and will buy new D&O policies. All insurance policies are assumed unaltered, and insurers are exempt from bar dates and cure filing requirements.

Administrative Claims and Claims Resolution

• Administrative claims that must be filed but are not filed by the bar date are barred and discharged. No request is needed for administrative claims already allowed by final order, under the plan, or by settlement.
• Proofs of claim:
  • Holders need not file proofs of claim to be allowed, except as a separate order establishing a claims bar date may require.
  • If a bar date is set, the debtors must notify affected holders and give the committee prior written notice where general unsecured creditors are affected.
  • Except for proofs of claim permitted by the DIP orders, all filed proofs of claim are deemed objected to and disputed, and they are deemed withdrawn and expunged on the effective date.
  • Late-filed claims are disallowed absent a final order.
• General unsecured claims are allowed or disputed in the ordinary course under nonbankruptcy law, as if the cases had not been filed, subject to the limits in sections 502 and 503. Holders may instead elect to resolve disputes in the bankruptcy court, which applies the law that would otherwise have governed. Cure disputes and any claims the debtors ask the court to decide are determined by the bankruptcy court.
• After the effective date, the reorganized debtors have sole authority to object to, settle and compromise claims without court approval, and may seek estimation of any disputed claim. An estimated amount caps the claim. Reconsideration requires a motion within 14 days of estimation, and expunged claims under appeal are estimated at zero.

Employees and Pension Plan

• Employment agreements are deemed assumed on the effective date, including all severance plans in existence on the petition date but excluding severance agreements with anyone not employed on the petition date. All employee equity and equity-based incentive plans, and any rights to acquire interests or new common stock, are terminated. Retiree benefits continue to be paid in accordance with applicable law, and the reorganized debtors may implement new employee programs without court approval.
• The pension plan is the Marelli North America, Inc. Defined Benefit Plan, a single-employer defined benefit plan insured by PBGC. After the effective date the reorganized debtors will satisfy its minimum funding requirements, pay any required PBGC premiums and administer it in accordance with ERISA and the Internal Revenue Code.
• PBGC asserts that if the pension plan terminates, each debtor would be jointly and severally liable for:
  • unpaid minimum funding contributions
  • the plan's unfunded benefit liabilities
  • insurance premiums, including termination premiums of $1,250 per plan participant per year for three years
  The debtors and reorganized debtors reserve all rights to contest the validity, priority and amount of those claims.

Distributions

• Distributions are made by the disbursing agent: the debtors, the reorganized debtors, or an entity they select with the Required Plan Sponsors' consent, not to be unreasonably withheld.
  • DIP claim distributions go to the DIP agent on the effective date.
  • Senior loan and emergency loan distributions go to the prepetition agents on the distribution date. The agents act as disbursing agents, recognize only holders of record on the distribution record date, and may impose trading freezes.
• Distributions of $100 or less are not made and the underlying claims are discharged. Claims asserted in foreign currency are converted to dollars at the exchange rate published in The Wall Street Journal (National Edition) on the effective date.
• No postpetition interest accrues on claims except as provided by court order (including the DIP orders) or the plan, or as bankruptcy law requires. Interest on DIP claims accrues as described above.
• Distributions are indefeasible and not subject to clawback. The debtors may set off against claims other than DIP claims and senior loan claims. A holder may assert recoupment only if it actually recouped and gave written notice by the confirmation date, except that nonresidential real property landlords keep any setoff and recoupment rights under their leases or applicable law for undisputed amounts, including against security deposits.
• Distributions are allocated first to principal and then to accrued but unpaid interest. A claim paid in full by a non-debtor is disallowed, and a holder whose combined third-party and plan recovery exceeds its claim must return the excess within 14 days or owe interest at the federal judgment rate. Claims payable under the debtors' insurance policies receive no distribution until the holder has exhausted its remedies under the policy.

Committee, Fee Examiner and Case Closing

• The official committee of unsecured creditors, advised by Paul Hastings and Morris James, dissolves on the effective date. It survives for two limited purposes: professional fee applications and substantial contribution requests, and appeals of the confirmation order or other appeals to which it is a party. Committee fees incurred between the confirmation date and the effective date, and on those surviving matters, are paid without fee applications or court review.
• The court appointed Lori Lapin Jones of Lori Lapin Jones PLLC as fee examiner under the fee examiner order [Docket No. 1515]. The fee examiner's fee claims cover work through the filing of the examiner's reports on all final fee applications, and the examiner's final fee application is due 30 days after those reports are filed.
• After the effective date, the reorganized debtors may close every case except one debtor's case, in which all remaining contested matters, including claim objections, will be administered. They will seek to close that last case once all disputed claims are resolved and remaining cash is distributed.

Parties and Advisors

• Debtors: Kirkland & Ellis LLP and Kirkland & Ellis International LLP, with Pachulski Stang Ziehl & Jones LLP as co-counsel; John Nicholson, general counsel, signed the plan for Marelli Automotive Lighting USA LLC and its debtor affiliates.
• Consenting equity sponsor: Kohlberg Kravis Roberts & Co L.P., represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP.
• DIP agent: GLAS USA LLC.
• Initial Tranche A Lender: Deutsche Bank AG, London Branch, represented by Willkie Farr & Gallagher LLP.
• Ad Hoc Group of Senior Lenders: Akin Gump Strauss Hauer & Feld, Houlihan Lokey, AlixPartners, Ernst & Young and Cole Schotz.
• Prepetition agents: Mizuho Bank, Ltd., administrative agent under the senior loan agreement and security and facility agent under the emergency loan agreement.
• Consenting Senior Bank Lenders: Davis Polk & Wardwell, Richards, Layton & Finger, Nagashima Ohno & Tsunematsu, Anderson Mori & Tomotsune and Huron Consulting Services.
• Committee: Paul Hastings LLP and Morris James LLP.
• Claims, noticing and solicitation agent: Kurtzman Carson Consultants LLC dba Verita Global.